Americann CEO Tim Keogh and VP of Sales and Business Development Doug Carr in entrance of the MCC throughout building.

Nearly a million sq. toes in complete capability — all devoted to rising and processing horticulture’s hottest rising crop, authorized hashish — is about to come back on-line in Southeastern Massachusetts in early September.

Christened the Massachusetts Cannabis Center, the large, state of the artwork 52-acre construction can be “a center of excellence for the cannabis industry” and can present product to medical sufferers and adult-use shoppers all through the state, based on the firm.

The 800,000 sq. foot manufacturing greenhouse in Freetown, MA, with extra sq. footage for processing and workplace house as effectively (987,000 complete), can be occupied and managed by Americann, Inc., a Denver, CO-based, publicly traded agricultural technology firm that develops hashish cultivation, processing, and product manufacturing services. The startup may even lease sections of the facility to 6 tenants that may every develop in 100,000 sq. foot blocks.

How huge of a guess is this for the shareholder-funded group?

Well, taking a gander at the company’ financials, which sport complete revenue losses of $4.4 million in 2018 and $2.7 million the earlier 12 months, one would assume the startup’s buyers are anticipating a greater story to inform at vacation cocktail events come the finish of 2019.

With the opening of such a formidable facility in Massachusetts this 12 months, together with its acknowledged intentions to open related services in states during which hashish is authorized for medical and grownup use, it stands to purpose there can be good days forward for Americann.

Tim Keogh, the group’s CEO, stays optimistic about the prospects of a large-scale hashish manufacturing in a greenhouse setting.

“I’d say about 98% of the cannabis being grown in the U.S. right now is being produced in indoor, renovated warehouses, but we feel the future is a transition out into the greenhouse,” Keogh says.

Describing most repurposed industrial develop services as “horribly inefficient,” a truth Keogh says rings significantly true in the design side, as “many of them are former factories or warehouses that have been converted into cultivation spaces.”

Currently, Keogh says there are numerous authorized markets which can be conserving indoor warehouse manufacturing greater than viable through the excessive wholesale costs that growers can nonetheless demand from retail. Yet, he’s additionally witnessed in the ultra-competitive markets a kind of worth bubble bursting, the place intense competitors and surplus product (suppose Oregon) mix to drive each wholesale and retail costs into the filth.

It is in these downward worth strain conditions, which is able to solely turn into extra widespread as authorized entry in the U.S. expands, the place a grower should uncover new efficiencies to carve down the general value of manufacturing.

That is exactly the place greenhouse cultivation hits a kind of financial candy spot, Keogh says.

“In controlled environment (growing), you rely on your lights 100% of the time,” he says. “Once you get into the greenhouse and you kick out a lot of those utility costs, you see your cost of production start to go down. A big part of this switch (to greenhouse) is just future-proofing against price compression in the market.”

An Ag Tech Company That Produces Cannabis?

An artists’ rendering of the completed Massachusetts Cannabis Center manufacturing greenhouse house.

Americann, which markets itself as an agricultural technology firm, says it can outfit its soon-to-open mega greenhouse with the newest and greatest from the world of digital and {hardware}.

“We’re talking very robust environmental controls, LEDs for supplementary (light), fertigation systems with automated metering, and then we get into things that are unique to cannabis, like our odor mitigation system,” Keogh says. “We’re ionizing the air so we’re not out here pumping a bunch of pungent cannabis odor into the community.”

The odor mitigation tech that AmeriCann will use was repurposed from hog farms and retrofitted for the greenhouse, Keogh says. Another space of tech funding can be in seed-to-sale monitoring techniques.

“We’re developing our own seed-to-sale tracking systems that can interface with the data from our environmental control systems, which helps us match up how different flavor profiles and levels of terpenes (in the finished product) will match up with how we grew the cannabis,” he says.

Finance Still a Limiting Factor

Just as a result of Massachusetts voters overwhelmingly permitted a authorized leisure hashish marketplace for their state, that doesn’t imply life at AmeriCann is all sunshine and kittens today. There are nonetheless many challenges to producing and advertising and marketing a product that continues to be unlawful beneath Federal regulation.

“The banking side of this industry is still tremendously clunky,” Keogh says. “Banks that work with cannabis companies have to be vetted, which costs them money, and then some of these banks are turning around and charging fees of $5,000 to $10,000 a month just for basic business checking.”

Sounds like the excellent state of affairs for the banks to drive income for his or her shareholders, proper? Not so quick, based on the CEO.

“When we talk to our bankers, who are collecting these fees and making all this money, it’s not like they’re wringing their hands and saying this is so great,” Keogh says. “They want more clarity (from the Feds), too.”

“Banking is a huge issue,” he continues. “And the other piece of that is the taxes, as a cannabis retailer we pay effectively a 70% tax rate on cannabis.”

Is Old School Hort Experitse ‘All In’ on Cannabis?

Another challenge AmeriCann has been working up in opposition to is reluctancy from these already working in horticulture in relation to transitioning the experience to authorized hashish.

“Traditional horticulture expertise in some ways still refuses to participate in the cannabis industry because of the federal illegality issues, and a lot of the top-end growing and breeding knowledge in the industry is staying away from this until it all sorts itself out,” Keogh says.

Still, Keogh and Co. by no means threw in the towel on their mission to merge conventional greenhouse rising and authorized hashish cultivation. What we’re about to see open in Freetown is the results of that persistence.

“We were able very early on to present a professional approach and bring in horticulture experts,” Keogh says. “We’re a public firm. We’re audited, and we report back to the Securities Exchange Commission (SEC) identical to some other authorized enterprise.

“This can be done professionally and responsibly, and it’s not something the (horticulture) industry needs to be afraid of,” he says. “With that approach, we were able to get ahead of the market and implement a traditional greenhouse growing system.”

As of press time, The Massachusetts Cannabis Center is set to be formally unveiled to the media and others someday in mid to late September.

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